Seeking a Cap on Adjustabe Rate Mortgage Rates

With the Thanksgiving festivities, I missed this piece of news regarding Arizona lawmakers seeking a rate cap on adjustable rate mortgages. According to the EV Tribune (Nov 23rd, 07):

Arizona’s chief financial regulator may ask state lawmakers to cap how much lenders can hike the interest on adjustable rate mortgages.

However, this is easier said than done becuase there is a provision which bars the legislature from impairing contracts.

Getting the measure through the Legislature might be the least of Rotellini’s problems: The state constitution has a specific provision barring enactment of any “law impairing the obligations of a contract.” And the mortgage deals signed by borrowers are contracts.

In other major subprime news, the Wall Street Journal reports a Bank of America estimate that “$362 billion worth of adjustable-rate subprime mortgages” will adjust next year. This means the mess is only halfway through. Read the full WSJ article for details (hat tip John Wake, Arizona Real Estate Notebook).

This site is for informational purposes only. It is not sponsored or in any way affiliated with the government. If you are in need of a mortgage loan, consult with a licensed mortgage professional. All fair housing and equal housing opportunity laws apply when applying for a mortgage or buying a home. Copyright 2012.